The developers of the lithium-ion battery won the Nobel Prize in Chemistry 2019, in recognition of a scientific achievement that has helped power our mobile phones, laptops, and electric vehicles (EVs).
“It can also store significant amounts of energy from solar and wind power, making possible a fossil fuel-free society,” The Royal Swedish Academy of Sciences said, noting that lithium-ion batteries have created a rechargeable world over the past decade.
In the new decade, batteries and battery technology are set to play an increasingly important role in bringing more electric vehicles and renewable energy to the market, analysts say.
Rapidly declining costs and the potential to scale up existing and breakthrough battery and energy storage solutions are set to dramatically change the global mobility market and the power grid over the next ten years.
A lot of investments will be necessary in scaling up emerging battery and energy storage technology, as well as in the further development of lithium-ion batteries and alternative battery tech, to support the clean energy transition while global demand for electricity continues to rise.
Continuously falling battery costs, and rising capacity and usage of clean energy are set to result in booming global stationary energy storage over the next two decades, which will require total investments of as much as US$662 billion, BloombergNEF (BNEF) said in a report last year.
Energy storage installations across the world are expected to soar to 1,095GW, or 2,850GWh, by 2040, compared to a modest deployment of just 9GW/17GWh as of 2018, according to BNEF’s forecasts.
Unsurprisingly, the key driver of the energy storage installation boom will be additionally plunging costs of lithium-ion batteries, which will give financial rationale to additional uses of storage and surging installations of stationary energy storage.
According to BNEF, the exponential rise in renewable-sourced electricity and EV use will transform the global power systems and the transportation sector, driving demand for energy storage.
“The report finds that energy storage will become a practical alternative to new-build electricity generation or network reinforcement,” according to BNEF’s analysts.
According to UBS, energy storage will be the next critical catalyst for a global shift towards renewable energy. Current energy storage capacity represents just 17 percent of total installed solar and wind capacity, UBS said in a report in November.
“Energy storage cost has almost halved in the past five years but generally remain too pricey for scale-up applications,” UBS says.
The investment bank expects that by 2025, energy storage cost will be under a third of what it is now. These lower costs would spur additional demand for renewables, batteries, and related materials and chemicals.
In the coming decade, energy storage costs are set to fall by 66-80 percent, driven by battery makers’ expansion plans, experience from EV batteries, and material cost cuts in renewables lowering power system costs, UBS’s analysts note.
The energy storage market could be worth up to US$426 billion by 2030.
That is six times the current market value, UBS said.
Battery prices have declined by 87 percent in real terms since 2010, to US$156/kWh in 2019. By 2023, average prices will be close to US$100/kWh, BNEF said a report last month.
“New technologies like silicon or lithium anodes, solid state cells and new cathode materials will be key to helping cost reductions play out,” BNEF said.
Lithium-ion batteries have emerged as the clear winner in the battery race, but their drawback in energy storage currently is that lithium-ion energy storage systems are maxing out at around four hours, Wood Mackenzie’s Principal Analyst – Energy Storage, Rory McCarthy, says.
“In the race to develop a winning storage solution, various other technologies will strive to compete with lithium-ion. It won’t be easy to beat on economies of scale, but for storage exceeding the four- hour mark, there’s a clear gap in the market,” McCarthy said.
According to a Rocky Mountain Institute report from October 2019, as early as 2025, and no later than 2030, non-Lithium-ion battery technologies are set to make early-stage deployments in long-duration energy storage, electrification of heavy-duty transport, and battery-integrated approaches to EV fast-charging infrastructure.
“Massive investments in battery manufacturing and steady advances in technology have set in motion a seismic shift in how we will power our lives and organize energy systems as early as 2030,” Rocky Mountain Institute said.